Norton Rose seals $1.9bn merger with America's Fulbright & Jaworski
14 November 2012 | By Joshua Freedman
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Norton Rose is set to merge with US firm Fulbright & Jaworski, the firms have announced, with the deal going live on 1 June 2013.
The combined firm will be called Norton Rose Fulbright and, according to the UK firm, will join the top ten law firms globally by revenue and number of lawyers.
The firms’ combined revenues will come to roughly $1.9bn (£1.2bn), with Norton Rose turning over $1.32m in 2011-12, according to The Lawyer UK 200 2012, while Fulbright’s 2011 income was roughly $580m.
The confirmation follows one of the longest-running tie-up discussions in the legal market, with the UK and US duo understood to have been in talks for over a year.
It comes on the back of a Norton Rose partners’ conference in Toronto the weekend before last in which attendees voted on the combination, while Fulbright held its poll over the weekend just gone. Norton Rose CEO Peter Martyr is understood to have been in the US since the conference finalising the deal.
Some Norton Rose partners were not informed about the proposals until they arrived at the conference.
Martyr told The Lawyer today (14 November): “Certainly from our point of view and from Fulbright’s point of view it’s a spot-on marriage and it should really give us some brilliant opportunities in the future. One thing we really want to invest in which we think is a must for a global organisation is a regulatory practice. What we’re getting here is a top-class regulatory practice. In my view it will be a leader into a new chunk of business.”
Martyr is understood to have told board members a year and a half ago that the firm was not in talks with a US firm, with sources suggesting the serious discussions came after the firm sealed a merger with Canadian firm Macleod Dixon, its second deal in Canada (4 October 2011).
He today confirmed that the duo had been talking for around a year and at “full pace” for the last five or six months, adding: “We’ve been best friends for a long time and if you are best friends for this long things creep up slowly until you say maybe we should do something about this.”
He will be the global CEO of the combined business, while Fulbright chair-elect Ken Stewart will be managing partner of the US operations and will take a senior position on the overall global executive committee. Other Fulbright partners will also sit on the committee.
The new firm will be structured with a Swiss Verein over the top for accounting and tax reasons, in line with the firm’s other mergers in Australia and Canada, with the separate arms not sharing profits. The fiscal regime in the US would leave the firm with a large tax bill if the legacy firms became financially integrated.
Martyr said the firm had hired two of the Big Four accountancy firms to advise on the deal, adding: “I think we’ll watch and see what the accountants do [before deciding whether to merger financially]. Our behaviour is designed to the effect that we behave as a single business.”
The news comes after the firm went live with the Macleod Dixon tie-up on 1 January this year, following its first merger in Canada with Ogilvy Renault in 2011 (15 November 2010).
That happened at the same time as a combination with South African firm Deneys Reitz.
Martry said in a statement: “We have been looking at the US market for a number of years, seeking a firm that meets our requirements for excellence in law, good business synergies and a compatible culture. Fulbright & Jaworski meets all our criteria. It is financially strong, with forward-looking management and similar strategic growth aspirations.
“As Norton Rose Fulbright, we will continue to invest in our strongest practice areas and develop our expertise across our key industry sectors. We also expect to continue extending our global business not only in the US, but in the emerging growth markets of the future, in particular in Latin America, Africa and Asia.”
Stewart added: “This is a smart combination of two groups whose geographic presence, capabilities and client service cultures are strongly complementary. The combined organisation can provide the experience, insight and service our clients need everywhere they do business around the world.”